Banks make uneasy investors, especially in their own corporate clients. That applies to Russia’s VTB. It holds nearly 22 per cent of EN+, the aluminium and power group. VTB agreed in January to take a stake from the group’s oligarch founder, Oleg Deripaska, in a deal to remove economic sanctions from the US government. On Monday, the Financial Times reported that VTB may have found Chinese buyers for part of the stake. VTB will also want to be shot of EN+ shares given the slowdown in global industrial production.
VTB caught the hot potato thrown by Mr Deripaska. The bank had already bought a stake of just over 4 per cent in 2011, valuing EN+ at $11.5bn. By the time it took on the larger holding, that valuation had far more than halved. The number has gone on dropping. Even so, at an enterprise value of 8 times this year’s forecast ebitda, EN+ does not look cheap against its peers. Two-thirds of its operating earnings come from aluminium.
Understandably, VTB probably did not find a long queue of buyers waiting at its door. Step right up China. The country has willingly provided some financial support for Russian state-controlled entities Rosneft and Gazprom in recent years. EN+ may not be in state hands, but VTB certainly is.